"It's difficult. In the curia there are holy people, really, there are holy people. But there is also a current of corruption, it's true, there is," Francis told members of the Latin American and Caribbean Confederation of Religious (CLAR) (sic) earlier this month.

"The 'gay lobby' is mentioned and it's true. It's there... We have to see what we can do," the Pope was quoted as saying in a summary of his speech drafted by CLAR leaders after the 6 June meeting. The document was published by Chilean website Reflexion y Liberacion.

The Vatican spokesman, the Rev. Federico Lombardi, declined to comment, while CLAR said it was greatly distressed that the paper had been published and apologised to the Pope.

The existence of a gay lobby and a related bitter power struggle inside the Vatican first emerged in a letter written by a high Vatican official tasked by Benedict with cleaning up the Holy See's murky finances, to Cardinal Secretary of State Tarcisio Bertone.

In the letter, Monsignor Carlo Maria Vigano claimed he was being dispatched to a new post far from Rome, as a consequence of false accusations moved against him by power groups including gay exponents, upset by his fight against illegal financial activities.

The letter was published in a book by Italian journalist Gianluigi Nuzzi that triggered the so called "Vatileaks" scandal, which saw the Papal butler convicted of leaking secret papers. Vigano is now the Apostolic Nuncio to the United States.

Allegations about a gay lobby intensified as Pope Benedict surprised the world announcing he was to step down in February.

Italian daily La Repubblica reported the dossier "depicted a network of different power lobbies," working inside the corridors of the Holy See, including one made up by clergymen "united by sexual orientation".

According to the newspaper, the report said some prelates had been subject to "external influence" from laymen with whom they had relations of "worldly nature". These were then favoured in securing jobs and business with the Vatican.

The report came in a single copy and was disclosed only to the former Cardinal Jorge Bergoglio as he was elected pontiff.

Bergoglio took the name of Francis from St Francis of Assisi, saying that the founder of the Franciscan Order's devotion to the poor should work as an example for the whole Catholic Church from the top down. He has often lashed out at greed and corruption also inside the Vatican.

"Saint Peter didn't have a bank account," the Pope said earlier this week, adding that "a rich Church has no life."

"We have to carry on the Church's operation but with a poor heart, not with that of an investor or businessman," Francis said.